let the shell spin begin

Hi All

The article at the bottom of the post will be a classic Shell FLNG spin response to any of MEO's TS media or positive news.

Check out the article's quote "SOURCES have indicated the joint venture is more comfortable with current carbon dioxide handling technology and that, if a LNG project did materialise, Shell would most likely promote its proprietary floating LNG technology ahead of onshore processing in the Northern Territory".

The SOURCES (who are revealed cryptically in the last couple of paras by reminding petronas they were only able to even get into ES, in the first place, because of Shell's good nature...) are comfortable with CURRENT CO2 handling technology.... This IMHO means that, imho, Shell is TRYIG to push CO2 sequestation. Funny thing is though Shell commissioned a brillant FLNG research document:

http://www.gastechnology.org/Training/Documents/LNG17-proceedings/12-1-Barend_Pek.pdf

The report indicates that that Shell's FLNG is purpose built to handle lean gas. That is, very low CO2 content feed gas. In fact, the report states (see top of p.6) "it became clear that the acid gas removal unit had to be developed for CO2 concentrations ranging from 1 to 10%".

The BEST part of the report is that "for cases with a high CO2 content in the feed gas, CO2 sequestration facilities are projected".

Actually Shell are very well informed about the very high risks (i.e. lots and lots of uncertainties) and very high cost of CO2 sequestation via FLNG. That is, the following link is to aa SHELL branded document re Prelude (i.e. current Shell thinking). If you were ever to be convinced that FLNG CO2 sequestation is a dead duck for Evans Shoal's circa 18-25% CO2, I encourage you to read p. 53 to p. 56.

http://s00.static-shell.com/content/dam/shell-new/local/country/aus/downloads/about-shell/prelude/chap4highres.pdf

The Shell Prelude FLNG document list an amazing array of reasons which validate why Co2 sequestation is not a cost effective approach via FLNG.

Some might say well just bleed the C02 into the atmosphere. Bleeding 2tcf (i.e. probably the best outcomes for Blackwood to give some perspective around what 2tcf of CO2 repreents) is not an option even under Tony Abbott.

Also, how can any JV partner give up circa a quarter of their gas, at a cost, when Tassie Shoals turns that gas into methanol (i.e. a profit).

It may take a little time, but, imho, even Shell will come to the party. Politically, Shell is better off selling its stake so as to mitigate the impact upon the FLNG concept brand when the Tassie Shoal concept gets the green light, imho!!

Happy reading.

Adl

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Partners buoyed by appraisal

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By Russell Searancke

01 November 2013 00:00 GMT

The Shell-led owners of the large Evans Shoal gas field off northern Australia have drilled a successful appraisal well to help take a step toward a liquefied natural gas project, writes Russell Searancke.

Shell is the operator but Eni drilled the Evans Shoal North-1 appraisal well on behalf of its joint venture partners using the jack-up Ensco 104.

The Italian player said a production test of the well flowed at a facility-constrained 30 million cubic feet per day of gas.

The Evans Shoal North-1 well was drilled to a depth of 3955 metres, and is 12 kilometres from the previous Evans Shoal-2 well.

Eni said results of the latest appraisal indicated the two wells “share common reservoir characteristics and are in hydraulic communication”.

Eni said it is committed to “fast-track development of the significant and known resources in this exploration area”, but did not elaborate.

The Italian major confirmed that Evans Shoal contains “at least” 8 trillion cubic feet of gas in place, without referring to the field’s very high carbon dioxide content of about 28%, which has previously acted as a barrier to development.

The companies interests in Block NT/P48 are Shell with 32.5%, Eni with 32.5%, Petronas Carigali with 25% and Osaka Gas on 10%.

Shell and Osaka Gas have been co-owners since the very early days — the field was discovered in 1988, but other joint venture partners have come and gone.

Eni and Petronas are the most-recent arrivals, and both have come on board with LNG in mind.

Sources have indicated the joint venture is more comfortable with current carbon dioxide handling technology and that, if a LNG project did materialise, Shell would most likely promote its proprietary floating LNG technology ahead of onshore processing in the Northern Territory.

Petronas entered the Evans Shoal project in September 2007 by buying half of Shell’s equity.

At the time, Shell paid tribute to Petronas’ “strong LNG supply reliability and marketing credentials”.